LED incentives still relevant in U.S. market

Tuesday, April 10, 2018

Conservation advocates continue to endorse LED incentives even though a prohibition on the sale of more energy-intensive lighting products is only about 20 months away in the United States. A new position paper from the American Council for an Energy-Efficient Economy (ACEEE) notes that halogen and incandescent bulbs still garner strong sales, and advises that utilities, state and local governments shouldn’t be too quick to step back from the longstanding focus on residential lighting as easy an cost-effective source of energy savings.

“While the growth in LED market share is promising, these LEDs are largely displacing CFLs (compact fluorescent lamps),” observes Jennifer Thorne Amann, buildings program director with the ACEEE. “The market share of halogens and conventional incandescents has held steady, hovering close to 50 per cent of sales since the end of 2014.”

As of January 1, 2020, lighting products sold in the U.S. will have to comply with a minimum energy efficiency standard of 45 lumens per watt (LPW), meaning that currently available halogen and incandescent bulbs must be removed from the market. Thorne Amann expresses confidence that legal challenges will not derail the looming implementation of the standard, but acknowledges that the sales prohibition may be difficult to enforce if some, or many, retailers attempt to surreptitiously unload non-compliant stock. The best case scenario may be somewhat optimistic.

“Rather than pre-determine the final fate of programs while the transition plays out, programs should take more of a ‘wait and see’ approach,” Thorne Amann maintains. In the interim, she sees opportunities for conservation gains through a range of targeted programs for both population segments that have been slower to adopt LEDs and early adopters of LEDs bulbs who would be open to LEDs in specialty lamps or associated lighting controls.

Environmental Protection Agency (EPA) data for 2015-16 shows LEDs have achieved varying market penetration from state to state — garnering upwards of 40 per cent of market share in California, Oregon and Washington, but less than 20 per cent in many more states. She also points to studies showing a drop in LED sales when incentive programs were scaled back in New York and Massachusetts.

“As the market shift to LED progresses throughout the country, it is likely that residential lighting programs will no longer be cost-effective beyond 2021,” Thorne Amann projects. “The residential lighting market will have transformed from an incumbent technology, largely unchanged for more than 100 years, to an entirely new technology with unprecedented speed — a major energy efficiency success story.”

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